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Press Release
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Source: Weiss Ratings, Inc.
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Monday January 12, 10:25 am ET
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HMOs and Banks Report Just Three Failures Each for the Year
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JUPITER, Fla.--(BUSINESS WIRE)--Jan. 12, 2004--With the economy gaining momentum during
the second half of 2003, the number of failed insurance companies declined 21.4 percent,
to 22 compared to 28 insurer insolvencies in 2002, according to Weiss Ratings, Inc., the
nation's leading independent provider of ratings and analyses of financial services
companies, mutual funds, and stocks. Four life and health insurers and 18 property and
casualty insurers failed in 2003, compared to three and 25 respective failures in 2002.
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The largest failed insurance companies in 2003 were:
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Company
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Headquarters
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Type
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Failure
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($ Mil)
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Rating
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Western United Life Assur. Co
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Seattle, WA
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L&H
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12/24/03
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1,559.8
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C-
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Republic Western Ins. Co.
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Phoenix, AZ
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P&C
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05/20/03
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576.6
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C-
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Reciprocal of America
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Glen Allen, VA
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P&C
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01/29/03
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478.8
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C
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Old Standard Life Ins. Co.
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Boise, ID
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L&H
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12/24/03
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425.3
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D
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Old West Annuity & Life Ins. Co.
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Phoenix, AZ
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L&H
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12/24/03
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224.4
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D
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Weiss Safety Ratings: A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak
(1) Figures are as of the most recent data available at time of failure.
"Now that the property and casualty industry has arguably reached the peak of a
hard market, premium increases are expected to slow, driving underwriting earnings
down and potentially, the number of insolvencies up," said Melissa Gannon, vice
president of Weiss Ratings, Inc. "However, the upswing in the securities market
should reduce the impact of the soft market."
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HMOs and Banks Report Just Three Failures Each for the Year
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Premium increases, cost-cutting initiatives, and economic growth helped strengthen
the nation's HMOs and banks, which reported only three insolvencies each in 2003.
HMO failures decreased 70 percent, from 10 in 2002 to just three in 2003, while the
banking industry experienced a 72.7 percent decline, from 11 insolvencies to only
three during the same period.
"Premium increases and effective cost-cutting strategies helped many HMOs survive,
and even prosper, during three weak economic years, while banks have benefited from a
very favorable interest rate environment," added Ms. Gannon.
To avoid financially weak companies, Weiss Ratings recommends that consumers and
businesses monitor the financial health of their HMO, insurance company, and bank
using safety ratings with a solid track record for accuracy. The Weiss ratings are
based on an analysis of a company's capital, profitability, quality of investments,
liquidity, and stability.
Weiss issues safety ratings on more than 15,000 financial institutions, including
insurance companies, banks, and brokerage firms. Weiss also rates the risk-adjusted
performance of more than 12,000 mutual funds and more than 8,000 stocks. Weiss Ratings
is the only major rating agency that receives no direct or indirect compensation from
the companies it rates for issuing its ratings.
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At Date of Failure
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Company
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Headquarters
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Co-Type
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Date of Failure
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Total Assets *($Mil)
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Weiss Safety Rating
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Old Standard Life Ins. Co.
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Post Falls, Idaho
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L&H
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12/24/03
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425.3
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D
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Old West Annuity & Life Ins. Co.
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Phoenix, AZ
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L&H
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12/24/03
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224.4
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D
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Western United Life Assur. Co.
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Spokane, Wash.
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L&H
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12/24/03
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1,559.8
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C-
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Good Samaritan Life Ins. Co.
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Richardson, Texas
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L&H
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07/16/03
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n/a
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U
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Commercial Casualty Ins. Co. of NC
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Norcross, Ga.
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P&C
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11/17/03
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65.7
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E
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Superior Insurance Co
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Atlanta, Ga.
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P&C
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08/29/03
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90.6
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E
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Pacific National Insurance Co
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Lawrenceville, N.J.
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P&C
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08/05/03
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35.7
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D
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Wasatch Crest Mutual Ins Co
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Salt Lake City, Utah
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P&C
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07/31/03
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12.4
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E+
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Security Indemnity Ins. Co
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Manasquah, N.J.
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P&C
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06/27/03
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39.6
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D
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Republic Western Ins Co
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Phoenix, Ariz.
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P&C
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05/20/03
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576.6
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C-
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Narragansett Bay Insurance Co.
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Pawtucket, R.I.
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P&C
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05/01/03
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19.6
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C-
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Pawtucket Mutual Insurance Co.
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Pawtucket, R.I.
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P&C
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05/01/03
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111.9
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D+
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Farmers Mutual Insurance Co.
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Fairmont, W. Va.
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P&C
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04/15/03
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10.4
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D-
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White Hall Mutual Insurance Co
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Doylestown, Pa.
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P&C
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04/10/03
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7.8
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D
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Millers Insurance Co
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Fort Worth, Texas
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P&C
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03/24/03
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30.6
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E+
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Patterson Insurance
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Bossier City, La.
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P&C
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03/17/03
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18.4
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E-
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Washington Casualty Co
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Bellevue, Wash.
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P&C
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03/06/03
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41.5
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E
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American Natl Lawyers Ins. Reciprocal
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Nashville, Tenn.
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P&C
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01/31/03
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14.9
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D+
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Doctors Insurance Reciprocal RRG
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Nashville, Tenn.
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P&C
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01/31/03
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26.6
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C-
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Reciprocal Alliance RRG
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Nashville, Tenn.
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P&C
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01/31/03
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31.6
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C-
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Reciprocal of America
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Glen Allen, Va.
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P&C
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01/29/03
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478.8
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C
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Western Growers Ins Co
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Irvine, Calif.
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P&C
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01/17/03
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17.1
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E
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Weiss Safety Ratings: A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak
*Figures are as of the most recent data available at time of failure.
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